Heaven has no rage like love to hatred turned, nor hell a fury like a woman scorned. Quote from William Congreve ‘The Mourning Bride’ (1697)
The following is an analysis of the timeline of events and Inca Minerals Ltd (ICG) share price leading up to Inca Minerals General Meeting on 07/02/2013 and the subsequent share price collapse.
All of the significant extracts below are taken from publicaly available ASX Announcements and share price trade history information from Comsec’s Trading platform.
Significant events leading up to the Inca Minerals General Meeting on 07/02/2013 (pre-collapse).
Extract from ASX Announcement: “Inca appoints new director” dated 03/12/2012 Source: http://www.asx.com.au/asxpdf/20121203/pdf/42bpn695xtx0v3.pdf
“…Appointment of Ms Susan Thomas as Director and Chairperson
Inca Minerals Limited [ASX: ICG] (Inca) is pleased to announce it has appointed Ms Susan Thomas as a non-executive director and Chair of the Inca Board.
Ms Thomas is a director of Inca’s largest shareholder (Flexiplan Management Pty Ltd ) and brings considerable legal, commercial and risk management expertise to the Inca Board. …”
“… Flexiplan Management Pty Ltd (Susan Thomas is a director) 40,347,720 Fully-paid ordinary shares…”
Current Value: 40,347,720 @ $0.024 = $968,345.28
Share Trade History Price (Source: Comsec) 03/12/2012 Open 0.024 High 0.024 Low 0.024 Close 0.024 Volume 48,000 04/12/2012 Open 0.025 High 0.025 Low 0.025 Close 0.025 Volume 200,000
Extract from: “Inca Capital Raising Oversubscribed” dated 14/12/2012 Source: http://www.asx.com.au/asxpdf/20121214/pdf/42by1q368rbjvz.pdf
“… Inca Minerals Limited [ASX: ICG] (“Inca”) is pleased to announce that a capital raising of up to $700,000 has closed oversubscribed with Inca raising $805,000 through the placement of 40.25 million fully paid ordinary shares to professional and sophisticated investors at $0.02 per share (the “Placement”). …”
Share Trade History Price (Source: Comsec) 14/12/2012 Open 0.024 High 0.024 Low 0.023 Close 0.023 Volume 495,000
Extract from: “Inca Capital Raising - Notice Under ASX Listing Rule 3.10.5 and Section 708A(5)(e) of the Corporations Act” dated 27/12/2012 Source: http://www.asx.com.au/asxpdf/20121227/pdf/42c5zlr0cc42r9.pdf
“…Inca Minerals Limited [ASX: ICG] (Inca) lodged an Appendix 3B with the Australian Securities Exchange on 27 December 2012 with respect to the issue of 40,250,000 fully paid ordinary shares, pursuant to a placement made to sophisticated and professional investors as described in Section 708 of the Corporations Act 2001 (Corporations Act). …”
Share Trade History Price (Source: Comsec) 27/12/2012 Open 0.023 High 0.023 Low 0.023 Close 0.023 Volume 294,110
Extract from “NOTICE OF GENERAL MEETING” dated 07/01/2013 Source: http://www.asx.com.au/asxpdf/20130107/pdf/42c9q8sgb74b9n.pdf RESOLUTION 6 – Approval for a Company Director (Ms Susan Thomas) to Participate in the Placement To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution
“That, subject to the passing of Resolution 5 and pursuant to and in accordance with Listing Rule 10.11 and for all other purposes, Shareholders approve the allotment and issue of up to 20,000,000 Shares to Ms Susan Thomas and / or her nominees under the Placement on the terms and conditions set out in the Explanatory Memorandum”.
Voting Exclusion: The Company will disregard any votes cast on Resolution 6 by Ms Thomas and/or her nominees and any of their Associates. However, the Company will not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form or it is cast by a person chairing the meeting as proxy for a per son who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.
Resolution Explanatory Statements 5.3 Information Required by ASX Listing Rule 10.13 For the purposes of Shareholder approval of the issue of the Thomas Shares and the requirements of ASX Listing Rule 10.13, information is provided as follows: (a) The maximum number of Shares the Company can issue to Ms Thomas and/or her nominees is 20,000,000 Shares; (b) Each Thomas Share will be issued at a price no less than 80% of the VWAP of the Shares for the 5 trading days immediately before the Shares are issued; (c) The Thomas Shares will be ranked fully paid ordinary shares in the Company and shall rank equally with the Company’s current issued ordinary shares; (d) The Thomas Shares will be allotted and issued no later than 1 month after the date of this Meeting(or such date to the extent permitted by any ASX waiver or modification of the Listing Rules); (e) The Company intends to use the funds raised from the issue of Thomas Shares as additional working capital and investment capital for Inca primarily in relation to ongoing exploration, evaluation and development of Inca’s Peru projects. Funds may also be directed towards further exploration of the company’s other projects, as warranted; and (f) A voting exclusion statement is included in this Notice of General Meeting
Share Trade History Price (Source: Comsec) 07/01/2013 Open 0.024 High 0.024 Low 0.022 Close 0.022 Volume 523,617
Extract from: “Exploration Permit Granted for Drilling at Chanape” dated 21/01/2012 Source: http://www.asx.com.au/asxpdf/20130121/pdf/42cj8ccvhh93n1.pdf
“… The Company is pleased to announce that an Exploration Permit has been granted to Inca by the Ministerio De Energia Y Mias (“MEM”). This paves the way for the commencement of our maiden drilling campaign at the Company’s flagship Chanape Porphyry Project in Peru …”
Share Trade History Price (Source: Comsec) 21/01/2013 Open 0.025 High 0.027 Low 0.025 Close 0.025 Volume 774,653
Extract from: “Sulphide-bearing porphyry intersected in first hole at Chanape” dated 29/01/2012 Source: http://www.asx.com.au/asxpdf/20130129/pdf/42cmxx8f8lbjzr.pdf
“…HIGHLIGHTS • Sulphide-bearing monzonite porphyry intersected at 380m in first hole (CH-DDH001) at Chanape • CH-DDH001 extended to at least 600m depth with monzonite porphyry still present at 500m depth (initial E.O.H.) • Monzonite porphyry occurs below Breccia Pipe 8, which has known gold, silver and copper mineralisation from surface to > 100m with av. grade of 1.3g/t Au, 24g/t Ag and 0.2% Cu • Monzonite porphyry contains sulphides over entire intersection • Sulphides include pyrite, arsenopyrite, chalcopyrite and bornite as disseminations, stockwork veins, blebs and massive-veins, ranging from 1% to 30% of the rock • Rockchip sampling near CH-DDH001 returns grades up to 11.25g/t gold, 26.1g/t silver and 0.5% copper …”
Share Trade History Price (Source: Comsec) 29/01/2013 Open 0.030 High 0.043 Low 0.028 Close 0.035 Volume 49,583,309 30/01/2013 Open 0.036 High 0.045 Low 0.033 Close 0.043 Volume 44,747,640 31/01/2013 Open 0.042 High 0.054 Low 0.040 Close 0.049 Volume 98,893,939 01/02/2013 Open 0.049 High 0.060 Low 0.048 Close 0.058 Volume 44,098,996 04/02/2013 Open 0.062 High 0.092 Low 0.059 Close 0.092 Volume 100,777,516 05/02/2013 Open 0.091 High 0.105 Low 0.084 Close 0.098 Volume 102,027,299
Extract from: “Porphyry Open Ended At 600m Depth” dated 06/02/2013 at 8:45:17 AM Source: http://www.asx.com.au/asxpdf/20130206/pdf/42cvz570l1jmjv.pdf
“… HIGHLIGHTS • CH-DDH001 finishes in sulphide-bearing monzonite porphyry at 600m depth (EOH) • Sulphide-bearing monzonite porphyry over 220m interval and open ended • Sulphide mineralisation in CH-DDH001 between 500m and 600m consistent with mineralisation between 380m and 500m • Sulphide-bearing hydrothermal breccia identified in CH-DDH002 and open ended at 150m • Sulphide mineralisation in CH-DDH002 includes pyrite, chalcopyrite and arsenopyrite • First phase drilling now completed • Deeper holes required to investigate porphyry at depth • Top of sulphide-bearing monzonite porphyry less than 100m below valley floor …”
Notes: General Meeting of Inca Minerals Limited’s (Inca or Company) Shareholders was held at 3.00pm (WST) on 6 February 2013 at 52 Ord Street, West Perth, Western Australia, 6005
Share Trade History Price (Source: Comsec) 06/02/2013 Open 0.115 High 0.170 Low 0.115 Close 0.140 Volume 133,274,096
Current Value of 40,347,720 shares held by Flexiplan Management Pty Ltd (Susan Thomas is a director) as at 06/02/2013 (Day of the General Meeting)
Day’s High 40,347,720 @ $0.170 = $6,859,112.40 Day’s Close 40,347,720 @ $0.140 = $5,648,680.80
Extract from: “RESULTS OF GENERAL MEETING 6 FEBRUARY 2013” dated 07/02/2013 Released at 2:42:32 PM Source: http://www.asx.com.au/asxpdf/20130207/pdf/42cwyvcmljvctk.pdf
“… Inca Minerals Limited [ASX: ICG] (Company) is pleased to advise that all resolutions proposed at the General Meeting held at 3:00pm on Wednesday 6 February 2013 (WST) (Meeting) were passed without amendment by the requisite majority on a show of hands.
Ordinary Resolution 6: Approval of Company Director’s Participation in Share Placement: For: 23,194,083 Against: 295,600 Abstain : 6,000 …”
Share Trade History Price (Source: Comsec) 07/02/2013 Open 0.130 High 0.135 Low 0.099 Close 0.099 Volume 84,051,370
On 07/02/2013 (day of resignation) Flexiplan Management Pty Ltd (Susan Thomas Director) commenced selling shares. Refer to ASX Announcement: “Appendix 3Y Change of Director’s Interest Notice” dated 11/02/2013 Released 05:38:18 PM Source: http://www.asx.com.au/asxpdf/20130211/pdf/42cys3k1788ft2.pdf
No held prior to disposal 40,347,720 13.346% of ICG Disposed 13,584,422 shares for $1,683,880.64 (ave. $0.12396) No held after disposal 26,763,298 8.852% of ICG
Extract from: “Inca General Meeting Resolutions & Board Change” dated 07/02/2013 Released 09:29:45 AM on 08/02/2013 Source: http://www.asx.com.au/asxpdf/20130208/pdf/42cxd4xtmcs873.pdf
“… As previously announced, Inca Minerals Limited [ASX: ICG] (Company) is pleased to advise that all six resolutions proposed at the General Meeting held at 3:00pm on Wednesday 6 February 2013 (WST) (Meeting) were passed without amendment.
In passing Resolution 5 the Company’s shareholders approved, pursuant to the ASX Listing Rules, the issue of up to 50,000,000 ordinary shares in the Company (Shares) to sophisticated and/or institutional investors (Placement) under the terms and conditions listed in the Notice of General Meeting.
The passing of both Resolutions 5 and 6 provided shareholder approval, pursuant to the ASX Listing Rules, for one of the Company’s Directors, Ms Susan Thomas and / or her nominees to participate in the Placement under the same terms and conditions as offered to other subscribers under the Placement and to be issued up to 20,000,000 Shares within one month of shareholder approval.
Subsequent to the General Meeting Ms Thomas requested the Company’s Board agree to immediately issue her and / or her nominees 20,000,000 Shares on the minimum terms of the Placement and at a price of $0.0544 cents on 6 February 2013. The Board did not agree to Ms Thomas’ request and noted that at that time, with the Company’s share price trading as high as $0.17 cents and closing at $0.14 cents on 6 February 2013, it was not in the interests of shareholders to do so.
Ms Thomas has today notified the Company she has resigned as a director of the Company. The Board has accepted Ms Thomas’ resignation and thanks her for her contribution over the past 2 months. Accordingly, the Company advises that Shares will not be issued to Ms Thomas under the terms and conditions outlined in the Notice of General Meeting. …”
… no mention that Ms Thomas had commenced selling Flexiplan Management Pty Ltd’s holding of ICG shares. What are the continuous disclosure rules regarding market sensitive information e.g. Chairperson resigning and selling shares on the day of their resignation?
Share Trade History Price (Source: Comsec) 08/02/2013 Open 0.110 High 0.110 Low 0.097 Close 0.100 Volume 64,143,395
The apparent reason for Ms Susan Thomas’s sudden resignation after only 2 months …
“… Subsequent to the General Meeting Ms Thomas requested the Company’s Board agree to immediately issue her and / or her nominees 20,000,000 Shares on the minimum terms of the Placement and at a price of $0.0544 cents on 6 February 2013…”
This request was in contradiction to the General Meeting Explanatory Notes:
“…5.3 (b) Each Thomas Share will be issued at a price no less than 80% of the VWAP of the Shares for the 5 trading days immediately before the Shares are issued; and (d) The Thomas Shares will be allotted and issued no later than 1 month after the date of this Meeting (or such date to the extent permitted by any ASX waiver or modification of the Listing Rules); …”
”… The Board did not agree to Ms Thomas’ request and noted that at that time, with the Company’s share price trading as high as $0.17 cents and closing at $0.14 cents on 6 February 2013, it was not in the interests of shareholders to do so.
Ms Thomas has today notified the Company she has resigned as a director of the Company. The Board has accepted Ms Thomas’ resignation and thanks her for her contribution over the past 2 months. Accordingly, the Company advises that Shares will not be issued to Ms Thomas under the terms and conditions outlined in the Notice of General Meeting. …”
So, the value of 40,347,720 ICG ordinary shares owned by Flexiplan Management Pty Ltd (Susan Thomas Director) rose from 40,347,720 @ $0.024 = $968,345.28 on 03/12/2012 (the day of her appointment as Director and Chairperson of ICG, to a Day’s High 40,347,720 @ $0.170 = $6,859,112.40 on 06/02/2013 (the day of the General Meeting) … not bad for 2 months. I don’t have any problem with this at all, as the shares were bought by Flexiplan Management Pty Ltd prior to her appointment.
I do, however have an issue with her request for the “…immediate issue to her and / or her nominees 20,000,000 Shares on the minimum terms of the Placement and at a price of $0.0544 cents on 6 February 2013 …” which was outside the terms and conditions of the General Meeting Resolution and would have provided a windfall gain of up to $0.1156 per share i.e. 20,000,000 @ $0.1156 = $2,312,000 had the Board agreed to her request.
Ms Susan Thomas’s resignation and subsequent sell-off of shares has had a significant and detrimental impact on the share price of ICG and shareholder equity. It has also damaged the reputation of the stock, the Board and management of ICG.
Share Trade History Price (Source: Comsec) 11/02/2013 Open 0.100 High 0.120 Low 0.098 Close 0.110 Volume 31,840,421 12/02/2013 Open 0.115 High 0.140 Low 0.115 Close 0.135 Volume 44,448,752 13/02/2013 Open 0.140 High 0.155 Low 0.125 Close 0.125 Volume 45,673,905 14/02/2013 Open 0.130 High 0.135 Low 0.097 Close 0.100 Volume 42,581,892 15/02/2013 Open 0.096 High 0.110 Low 0.092 Close 0.105 Volume 27,111,286 18/02/2013 Open 0.120 High 0.125 Low 0.110 Close 0.115 Volume 18,696,787 19/02/2013 Open 0.115 High 0.115 Low 0.105 Close 0.110 Volume 7,772,651 20/02/2013 Open 0.105 High 0.110 Low 0.100 Close 0.105 Volume 12,477,782 21/02/2013 Open 0.105 High 0.110 Low 0.096 Close 0.105 Volume 20,948,123 22/02/2013 Open 0.110 High 0.110 Low 0.100 Close 0.100 Volume 7,914,528 25/02/2013 Open 0.100 High 0.100 Low 0.093 Close 0.094 Volume 11,482,919 26/02/2013 Open 0.090 High 0.105 Low 0.085 Close 0.105 Volume 11,344,250 27/02/2013 Open 0.065 High 0.073 Low 0.049 Close 0.050 Volume 143,896,499
Extract from: “Form 605 Notice of ceasing to be a substantial holder” dated 04/03/2013 Source: http://www.asx.com.au/asxpdf/20130304/pdf/42dft4hb5fh482.pdf FLEXIPLAN MANAGEMENT PTY LTD provided notice that they/she ceased to be a substantial holder
18/02/2013 On-market sale 2,259,972 ordinary shares for $259,896.79 (ave. $0.115) No held after disposal 24,503,326 8.105% of ICG
22/02/2013 On-market sale 763,298 ordinary shares for $76,329.80 (ave. $0.100) No held after disposal 23,740,028 7.852% of ICG
27/02/2013 On-market sale 8,623,660 ordinary shares for $536,813.12 (ave. $0.06225) No held after disposal 15,116,368 4.9999995% of ICG (Now officially under the substantial holder disclosure radar)
Extract from: “Inca Top 20 Shareholders” dated 04/03/2013 Source: http://www.asx.com.au/asxpdf/20130304/pdf/42dftd40bx795r.pdf
FLEXIPLAN MANAGEMENT PTY LTD was not recorded in Top 20. Twentieth largest shareholder held 2,100,000 ordinary shares as at 01/03/2013, therefore, FLEXIPLAN MANAGEMENT PTY LTD must have sold at least 13,016,368 ordinary shares (if not all 15,116,368 ordinary shares) between 28/02/2013 and 01/03/2013
Share Trade History Price (Source: Comsec) 28/02/2013 Open 0.051 High 0.053 Low 0.042 Close 0.044 Volume 55,252,161 01/03/2013 Open 0.047 High 0.047 Low 0.039 Close 0.040 Volume 22,990,927
So what fundamentals have changed since the share price hit $0.17 on 06/02/2013 (apart from Ms Susan Thomas’s resignation and subsequent dumping of shares) to warrant a 75% reduction in share price? Nothing that I can see.
The company is currently: • Reviewing drill results and conducting an on-site project inspection with internationally renowned porphyry experts (March/April 2013) • Building on local exploration capacity • Preparing for next drilling campaign
The next drilling campaign during 2013 will have a dual purpose of following up on porphyry discovery and developing near-surface gold resource potential.
Of potential significance:
Epithermal Gold Mineralisation Targets • Only 2 of 50 known breccia pipes drill tested • Only 15 of 50 known breccia pipes sampled • Three new gold-bearing breccia pipes discovered within 100m of Breccia Pipe Eight. • Potential number of breccia bodies unknown with extensive area under-explored • Porphyry occurs within large “sulphide envelope”, defined by SP anomaly 2.5km x 1km in size • Chanape is a similar-sized sulphide zone with multiple intrusive porphyries to Toromocho (1.6Bt @ 0.5%, Cu, 0.018% Mo, 7.16g/t Ag)
Good Luck to all shareholders, Cheers, GrayNomad
ICG Price at posting:
4.2¢ Sentiment: Hold Disclosure: Held
(20min delay)